What happened?
Crypto.com and Deribit will soon allow traders to use BlackRock’s BUIDL fund, which is a tokenized money market fund backed by U.S. Treasurys, as collateral on their platforms. The BUIDL fund offers a 4.5% annual yield, providing traders an alternative to volatile crypto assets. This development marks a significant integration of traditional finance instruments into the crypto trading ecosystem.
Who does this affect?
This move affects crypto traders and investors who use Crypto.com and Deribit for trading and are looking for more stable collateral options. Institutional clients, particularly those holding cash rather than crypto, stand to benefit from this new option without sacrificing income. The integration also impacts key players in the real-world asset and stablecoin space, such as Ondo Finance and Ethena Labs, who are major holders of the BUIDL fund.
Why does this matter?
The acceptance of BlackRock’s BUIDL fund as collateral could significantly impact the crypto market by introducing a more stable and yield-generating asset into trading practices. This change may lead to increased capital efficiency and reduced margin requirements, potentially attracting more institutional investors to the crypto space. As Coinbase looks to acquire Deribit, this development could further accelerate the mainstream adoption of tokenized assets, setting a precedent for future financial integrations between traditional and digital markets.